26 Jul 2005
The Power Sector Assets and Liabilities Management (PSALM) Corp. is expected to complete negotiations with the National Irrigation Administration (NIA) for the operation and maintenance of the irrigation components of two power plants to be privatized this year.
PSALM vice president Froilan A. Tampinco disclosed that the two government agencies have sat down to iron out kinks in the operation and maintenance agreement for the non-power components of the 100-megawatt Pantabangan and the 12-MW Masiway hydroelectric plants. Tampinco said these concerns, mainly raised by NIA, have to be adequately addressed preparatory to the bidding out of the two facilities located in Nueva Ecija.
Citing “strong investor interest in the hydroelectric assets of the country,” Tampinco expects PSALM and NIA to finalize the agreement in the coming weeks. “This should assure interested investors that the plants will be free of any problems by the time they are bid out,” he said.
Prospective bidders have been concerned with the financial capability of NIA to operate the non-power components of the plants. But the irrigation agency, citing specific provisions in its charter, had stated that it should retain the operation and maintenance of these components. It expects to generate from its O and M fees the required funds to support its responsibility.
The implementing rules of the Electric Power Industry Restructuring Act also provide that the National Power Corporation and PSALM or NIA will continue to be responsible for the dam and other structures as the Pantabangan-Masiway project was built primarily for irrigation.
As part of its power sector restructuring program, the government, through PSALM, started selling power plants to private investors in 2004, successfully bidding out six power plants, five of which are hydropower. These are the 3.5-MW Talomo plant in Davao, the 1.6-MW Agusan plant in Bukidnon, the 1.8-MW Barit plant in Camarines Sur, the 0.4-MW Cawayan plant in Sorsogon, and the 1.2-MW Loboc plant in Bohol. The sale of these hydropower plants generated $5.2 million.
Aside from Pantabangan and Masiway, PSALM is set to privatize five other hydropower plants by the end of the year. These facilities include the 360-MW Magat plant, the 75-MW Ambuklao plant, the 100-MW Binga plant, the 246-MW Angat plant, and the 0.8-MW Amlan plant.
Strategic Communications and Partnership Division |